a. Compute Peter’s 2014 depreciation expense. Peter has never elected Section 179 (expense election), nor has he ever elected out of taking bonus depreciation. Peter uses ADS straight-line method with a ten-year life to depreciate the equipment. He uses regular (accelerated) MACRS to depreciation the furniture and computer. The half-year convention applies to all three properties. b. Same as in Part a., except that the mid-quarter convention applied to all personal property placed in service in 2010. c. Same as in Part a. except that Peter purchased each of these properties in 2014. Compute depreciation for each of these properties for 2014 using the maximum depreciation allowed for each property without electing Section 179.
ADS (Alternative Depreciation System and MACRS (Modified Accelerated Cost Recovery System. Peter purchased the following new properties to use in his business.
Equipment: Acquired in April, 2007 at a cost of $72,000
Furniture: Acquired in March, 2010 at a cost of $84,000
Computer: Acquired in July, 2013 at a cost of $10,000
a. Compute Peter’s 2014 depreciation expense. Peter has never elected Section 179 (expense election), nor has he ever elected out of taking bonus depreciation. Peter uses ADS straight-line method with a ten-year life to
b. Same as in Part a., except that the mid-quarter convention applied to all personal property placed in service in 2010.
c. Same as in Part a. except that Peter purchased each of these properties in 2014. Compute depreciation for each of these properties for 2014 using the maximum depreciation allowed for each property without electing Section 179.
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